What Child and Family Benefits are Left?

By Randall Orser | Personal Income Tax

The federal government in its infinite wisdom decided to eliminate many benefits for families with children and did prop up the one benefit left giving families a monthly stipend depending on their income. Now the only benefit left is the Canada child benefit (CCB).

What is the Canada Child Benefit (CCB)?

The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under 18 years of age. The CCB might include the child disability benefit and any related provincial and territorial programs, such as the BC early childhood tax benefit.

The Canada Revenue Agency (CRA) uses information from your income tax and benefit return to calculate how much your CCB payments will be. To get the CCB, you have to file your return every year, even if you did not have income in the year. If you have a spouse or common-law partner, they also have to file a return every year.

Benefits are paid over a 12-month period from July of one year to June of the next year. Your benefit payments will be recalculated every July based on information from you and your spouse’s (if applicable) income tax and benefit returns from the previous year. If any of your information from the following list changes during the year, we will recalculate your benefit the month after the change occurs.

For July 2018, in its Fall Economic Statement, the Government proposes to strengthen the CCB by increasing the benefits annually to keep pace with the rising cost of living. In the fall of 2016, the Government committed to index the CCB to inflation starting July 2020, but the government believes that a growing economy and improved fiscal track means it can deliver on this commitment two years sooner. 

To be eligible for the Canada child benefit (CCB), you must meet all of the following conditions:

  • You must live with the child, and the child must be under 18 years of age.
  • You must be primarily responsible for the care and upbringing of the child.
  • You must be a resident of Canada for tax purposes.
  • You or your spouse or common-law partner must be:
    • a Canadian citizen
    • a permanent resident
    • a protected person
    • a temporary resident who has lived in Canada for the previous 18 months,                    and who has a valid permit in the 19th month
    • an Indian within the meaning of the Indian Act

What Benefits or Credits Could you Get?

When you apply, the Canada Revenue Agency (CRA) will determine if you are eligible for:

  • the Canada child benefit
  • any related provincial or territorial programs

The CRA will also register your child for the goods and services tax/harmonized sales tax (GST/HST) credit.

When Should you Apply?

Apply for the CCB as soon as possible after:

  • your child is born
  • a child starts to live with you
  • you or your spouse or common-law partner meet the eligibility conditions

CCB payments can begin the month after you become eligible, as long as you are still eligible at the beginning of the current month.

You should apply even if:

  • you share custody of your child
  • your child is living with you for a determined temporary period of time
  • your current family net income is too high to get the CCB (you might be eligible for other benefits)

Although the Canada child tax benefit and the universal child care benefit are no longer being issued, you can still request an adjustment for previous years, if you were eligible.

Who Should Apply?

The individual who is primarily in charge of the care and upbringing of the child should apply for the CCB. You are primarily responsible for the care and upbringing of the child if you:

  • supervise the child’s daily activities and needs
  • make sure the child’s medical needs are met 
  • arrange for child care when necessary

For CCB purposes, when a male and a female parent live together in the same household as the child, the female parent is usually considered to be primarily responsible for the child. In this situation, the female parent should apply. If the male parent is primarily responsible, he must attach a note to his application from the female parent. The note must state that he is primarily responsible for all of the children in the household.

If two parents of the same sex live together in the same household as the child, one parent should apply for the CCB for all of the children in the household. You are not considered primarily responsible if the child is legally, physically, or financially maintained by a child welfare agency. For more information on this situation, see children's special allowances.

Do you Share Custody?

You share custody if the child lives with you and another individual in separate residences on a more or less equal basis. The child might regularly alternate between residences in the following cycles:

  • four days with one person and three days with the other
  • one week with one person and the next week with the other
  • any other regular alternating cycle

Both individuals must be primarily responsible for the child's care and upbringing when the child lives with them. Each eligible individual will get 50% of the payment he or she would have received if the child lived with him or her all of the time. If you have just entered into a shared custody situation you have to apply for benefits.

Although a court order might state which individual should receive the CCB, the CRA is bound by the Income Tax Act, which is the legal authority the CRA uses to determine who eligible individuals are. If you start or stop sharing custody of a child, let us know as soon as possible.

How is the CCB Calculated?

Your Canada child benefit (CCB) payments are calculated for the period of July of one year to June of the next year using the following information:

  • the number of children who live with you
  • the ages of your children
  • your adjusted family net income
  • your child’s eligibility for the child disability benefit  

CRA recalculates your payment every July based on your adjusted family net income from the previous year. Your net income is the amount from line 236 of your income tax and benefit return. Your family net income is your net income plus the net income of your spouse or common-law partner, if you have one.

CRA "adjusts" your family net income so that we don't count any universal child care benefit (UCCB) and registered disability savings plan (RDSP) payments you receive. CRA does this to make sure that people with low and modest incomes get the most benefits they can. However, if you have to repay any UCCB and RDSP amounts, they will include them as part of your adjusted family net income.

Your marital status affects how your benefits are calculated. If your marital status changes, you need to tell CRA before the end of the month after the month your status changed. For example, if your marital status changed in August, tell them about the change by the end of September.

To estimate the amount of CCB you might be entitled to, as well as any benefit from CCB-related provincial or territorial programs and other benefits, use the child and family benefits calculator. Calculations are based on the information you enter in the calculator fields.

Basic Benefit for July 2018 to June 2019

CRA calculates the Canada child benefit (CCB) as follows:

  • $6,496 per year ($541.33 per month) for each eligible child under the age of six
  • $5,481 per year ($456.75 per month) for each eligible child aged 6 to 17

We start to reduce the amount of CCB you get when your adjusted family net income (AFNI) is over $30,450. The reduction is calculated as follows:

  • families with one eligible child: the reduction is 7% of the amount of AFNI between $30,450 and $65,976, plus 3.2% of the amount of AFNI over $65,976
  • families with two eligible children: the reduction is 13.5% of the amount of AFNI between $30,450 and $65,976, plus 5.7% of the amount of AFNI over $65,976
  • families with three eligible children: the reduction is 19% of the amount of AFNI between $30,450 and $65,976, plus 8% of the amount of AFNI over $65,976
  • families with four or more eligible children: the reduction is 23% of the amount of AFNI between $30,450 and $65,976, plus 9.5% of the amount of AFNI over $65,976

The CCB is now pretty much the only kid friendly tax benefit from our government. Only time will tell if it will actually benefit the lowest income people or not.

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About the Author

President/CEO Number Crunchers® Accounting Inc. Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.